Please ensure Javascript is enabled for purposes of website accessibility

Why Shares of Allot Rocketed Higher Today

By Timothy Green - Feb 4, 2020 at 12:37PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

An earnings beat coupled with impressive guidance triggered a big rally.

What happened

Shares of Allot (ALLT 1.23%) surged on Tuesday after the network intelligence and security solutions provider issued its fourth-quarter report. Allot beat analyst estimates across the board, producing double-digit revenue growth and a smaller-than-expected net loss. The stock was up about 30.4% at 1:05 p.m. EST today.

So what

Fourth-quarter revenue was $30.6 million, up 14% year over year and $2.5 million higher than the average analyst estimate. The company's backlog at the end of 2019 was $138 million, up from $69 million at the end of 2018. During the year, Allot signed recurring security revenue agreements worth $85 million on the basis of maximum annual revenue potential.

A rising chart.

Image source: Getty Images.

Non-GAAP (adjusted) earnings per share came in at a loss of $0.05, worse than a loss of $0.01 in the prior-year period but $0.02 better than analysts were expecting. The company ended the year with $117.6 million in cash, up from $103.9 million at the end of 2018.

CEO Erez Antebi said: "We believe that the recurring revenue and growth we gain from these deals will have a significantly positive long-term impact on our future. We expect to win further such deals in the coming year." 

Now what

For 2020, Allot expects total revenue between $135 million and $140 million, up from $110.1 million in 2019. At the midpoint, that guidance range represents year-over-year growth of about 25%.

The company also expects to sign more deals involving recurring revenue in 2020. Allot sees new deals totaling more than $140 million of maximum annual revenue potential being signed this year.

While the earnings beat was modest for Allot, guidance calling for accelerating revenue growth seems to have lit a fire under the stock. Shares of Allot are now up 80% over the past year, but still down 55% since peaking in 2012.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Allot Ltd. Stock Quote
Allot Ltd.
$4.95 (1.23%) $0.06

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/02/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.